A Royal Decree approved on 11 May 2012 aims to restore confidence in the Spanish financial system, currently heavily burdened by distressed real estate assets. The Royal Decree will require Spanish banks to increase provisions in respect of non-distressed real estate loans, and to transfer distressed real estate assets to independent asset management companies, by 31 December 2012. Those banks currently involved in merger integrations plans will have until 31 December 2013 to complete such transfers. Plans for compliance with the new additional provisions, including a divestment plan for assets linked to real estate risks, must be submitted to the Bank of Spain by 11 June 2012.
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